In a recent article which appeared on The Huffington Post, Joanne Doroshow arrives at a conclusion that appears to many to be counter intuitive – medical malpractice "reform" will increase, not decrease, the deficit. Republicans and other fiscal conservatives, however, would like you to continue focusing on the intuitive so they can push their tort reform agenda at the expense of those injured by the negligence of the medical community.
Utah’s very own Orrin Hatch was apprised of the economic realities that proposed reforms would bring in the form of a 7 page letter authored by the Congressional Budget Office. Doroshow underscores these findings which, unfortunately, have not made an iota of difference in the policy positions of Senator Hatch and others with the same views on the issue of medical malpractice "reform:"
CBO said that even if the country enacted the entire menu of extreme tort restrictions listed, including a Draconian $250,000 cap on non-economic damages, it could go no further than to find an extremely small percentage of health care savings, "about 0.5 percent or $11 billion a year at the current level — far lower than advocates have estimated.
And she notes:
On March 10, 2011, CBO provided a new analysis of H.R. 5, a bill before Congress that is considering these measures. CBO now says that enacting H.R. 5 would reduce total health care spending even less — 0.4 percent. Yet to find even this small amount, CBO ignored factors that would not only lower this figure but also likely increase the deficit.
For example, CBO acknowledges but does not consider in its cost calculations the fact that these kinds of extreme "tort reforms" would weaken the deterrent potential of the tort system, with accompanying increases in cost and physician utilization inherent in caring for newly maimed patients. CBO notes, "The system has twin objectives: deterring negligent behavior on the part of providers and compensating claimants for their losses …" In fact, CBO wrote, "imposing limits on [the right to sue for damages] might be expected to have a negative impact on health outcomes." Yet it brushed aside the fiscal impact of this not because it is untrue, but because there are too few studies on the topic.
She also highlights that the CBO studies overlook the following:
There will be new burdens on Medicaid and Medicare, as well, none of which were considered by CBO. If someone is brain damaged, mutilated or rendered paraplegic as a result of the medical negligence but cannot obtain compensation from the culpable party through the tort system, he or she may be forced to turn elsewhere for compensation, like Medicaid and Medicare. None of these increased costs are considered.
What’s more, whenever there is a successful medical malpractice lawsuit, Medicare and Medicaid can both claim either liens or subrogation interests in whatever the patient recovers, reimbursing the government for some of the patients’ health care expenditures. Without the lawsuit, Medicare and Medicaid will lose funds that the government would otherwise be able to recoup. Again, none of these lost funds are factored in by the CBO.
Doroshow correctly concludes that limiting or eliminating the rights of those injured by members of the medical community is not only bad public policy, it is bad economic policy.
